EGD News #29

This email was sent to the EGD mailing list on the 16th of May 2020.

Here are the things that I’ve been excited about this week.

Ilkka Paananen: Supercell learnings from 10 years

Last week we covered the Deconstructor of Fun article on Supercell’s ten years of existence. This week we are looking at the reflections of Supercell’s CEO Ilkka Paananen in a blog post on May 14th, titled “10 Learnings from 10 Years × Supercell”. It’s a remarkable reflection on the culture that they’ve built, and we here at Elite Game Developers wanted to highlight some of the aspects that early-stage gaming startup should take away from this.

Most of the takeaways are ones that should be aspirational for startups. And you need to understand that you don’t need lots of money to do these things. For example, even if you can’t attract the top talent, you may start by growing your own expertise. “These learnings and the culture that we have built together have worked for us, but that does not necessarily mean they would work for others. A big part of our success has also been luck. So if you’re building your own games company and its culture, don’t build a Supercell culture. Build the culture that works for your company.”

The infinite game

I’m a big fan of Simon Sinek, and everybody should check out his book “Infinite Game,” which talks about companies that are operating in a way that they don’t want to “win the game” but the “stay in the game.”

To be successful in free-to-play, you need players to stick around. It’s the only rule that makes sense. Monetization is easy; engagement is hard. “Always play the infinite game (no pun intended 🙂 ). As I mentioned, our dream is to create games that as many people as possible play for years and that are remembered forever. We want to play what Simon Sinek would call the “infinite game.” We’ve built the entire company around this idea.”

​ “[Teams] don’t launch games that they do not believe have a realistic shot at reaching our dream. The most important factor that our teams look at when they test our games in beta phase is how long players keep playing the game. That’s ultimately all our teams care about.”

Great teams

The magical pairs were something that I witnessed at Supercell in 2012 when both Hay Day and Clash of Clans were lead by two magical pairs. It’s the kind of thing like Steve Jobs and Steve Wozniak, where you have one person who has the drive, the vision and sells the idea. Then you have the other, more technical but also brings the heart. “Years later [into the company], we realized that it is not about having the best individuals, but having the best TEAMS.”

​ “Everything needs to fall in place: The game needs to match player interest at the exact time it is released. You need to have super talented individuals with very different capabilities and ways of thinking. Most importantly, the individuals need to work very well together in a psychologically safe environment.”

​ “We are still learning ways to create great teams … One very concrete thing that we have learned about forming new teams is to first put a very tight and well functioning core team of, say, 2-4 people together … We often talk about how it all starts from finding just TWO people who work extremely well together. There is complete trust, they can complete each other’s sentences, and at the same time they bring different perspectives and make each other better. Sometimes we call them magical pairs.”

Raise the bar

Ilkka shares an excellent piece of hiring advice that he received from his chairman back in the day. “When thinking about whether you should hire someone or not, try to imagine the average quality level of the people at your company. Then ask yourself whether the new hire would increase that average or not. Only hire if the average will increase.”

​ “[The] biggest learning might be how crucial it is to hire quality-oriented people and how important it is to have a quality-oriented company culture.”

Staying small

I think this was the best advice any gaming startup founder could take from this blog post.

“Concrete example: there’s no need to focus on fancy tools or tech if there’s no killer gameplay, because it’s a waste of time if gameplay doesn’t feel solid (you’ll notice rewriting / killing things and the dream about having the best possible focus isn’t fulfilled) … We have also learned that growing teams prematurely increases complexity and makes changing direction much harder. We have a few cases where we had to make the team smaller to get back on track, and in many cases that has worked out.”

Culture is how you behave

Behavior is everything. There’s a wise saying that culture is what is happening when the boss isn’t around.

“Culture is the sum of everyone’s actions, not a slide deck or something written on a wall … In my experience, culture is defined by the hardest decisions … What makes Supercell special and what I am most proud of is that the vast majority of decisions like these happen in the teams, without anyone outside the team (including me) getting involved.”

Trust, not hierarchies

Supercell has created a culture where people grow and learn from each other, from what they do, what they observe, and what they share. To facilitate all this, they’ve never had an organizational hierarchy or a reporting structure. “This is exactly how I would like Supercell to operate: in an ideal world, the teams would make all the decisions which means that I would make none. This is what I mean when I say that my goal is to be the world’s least influential CEO. People think that I am joking when I say that, but I am not.”

​”People are more capable than most companies/cultures allow them to be. Most companies are built with hierarchies, processes, and cultures that may teach people, but don’t let them contribute to their max capacity… Supercell has demonstrated that when you remove approvals, processes, hierarchies, and bureaucracies, our people can deliver incredible achievements. That’s fundamentally why we have 5 hit games that have been played by more than a billion unique players, creating experiences that will be remembered for a long time.”

Don’t fear to fail

Supercell has a budget that is hard to contend with. They can build games with big ideas and kill them without risking the company. The takeaways for founders here should be aspirational. Set a budget for a game project and then go wild. “To encourage our people to take risks and fail, we’ve tried to create a culture where failures are not only acceptable, but expected. In fact, we try our best not to think of them as failures, but as learnings.”

​ “One of my favorite days at Supercell was the all hands Friday update a few years ago where one of the game leads talked about the learnings from killing a game AND our marketing team shared a retrospective on a failed campaign where we lost a huge amount of money which led to the first negative month in a very long time at Supercell. I was so proud of these people who were brutally honest in front of everyone about what had gone wrong. That ensured that the entire company learned a lot from their experiences. It is these moments that make our culture stronger.”

No process, no rules

Continuing from the previous points, Ilkka talks about not creating artificial boundaries. You can “pull” great game out of game developers. “As an example, many years ago, we instituted a rule that all new games had three months to get to playable, because we wanted our new games to get to a proof of concept more quickly. Developers then started to game the system by starting earlier without telling anyone to make sure they could get to playable within that time frame. This created an unhealthy environment where developers were trying to get around the “rules” vs focusing on making the best game possible.”

Goal setting

Each team is moving quickly to figure out the game, that has incredible gameplay and what can become the game that people play forever. “In a very team centric culture like ours, we need to think about goal setting very differently. These days we think that we really have that one goal as a company, which is to build great games that as many people as possible play for years and that are remembered forever. That’s our long term goal … We simply let the teams set their own goals within this framework, and they in turn tell everyone else what they are.”

Core values

Ilkka warns us about not working on our values early enough. He regrets not finding the time to work on the values already when there were only the six founders in the company ten years ago. It took two years from the starting point of the company, to eventually work on them. “Having learned from this, these days we try to revisit our culture and values every 1-2 years. Our small leadership team of three meets with every single team at Supercell in all of our four offices, and we talk about the culture, and ask our teams to challenge whatever is the latest version of our culture document. I have found this to be a great way to improve our culture and also make sure all recent learnings are included in it.”

​ “We took a step back and in fact wrote a very detailed, old-fashioned memo about the culture. Yes, it takes a bit to read and digest it, but what could possibly be more important than our culture!? The next version of our culture document will also include real stories from Supercell that demonstrates our culture in action. This will hopefully make it even more clear.”

Finishing words

It’s a great ending to the ten-year story of the best games company that Supercell is. “One thing we do know is that we’ll stay focused on our vision to be the best place to create games.”

Blog

There’s a lot of things I’ve seen. I’ve been in discussion with investors for the last 15 years. I’ve been learning about what they like, and what is their profession? I think that’s the key here: It’s to understand what investors are? Why are they in the business of doing venture capital? Why are people investing money into startups?

Podcast

“If you look at Tactile Games, Lily’s Garden. Everyone is talking about them and for good reason. They prove that in such a crowded market [of match-3], you can innovate on a meta[game], and not just the normal meta, which is a storyline, like the Escape series, but it is a much more deeper controversial meta, kind of touching on what Choices and Episodes are doing.”

“I think this level of analysis and understanding why this works, and then why, whatever, the founder is trying to work on and what that means for the players. Why is this an unmet need? And why is this an opportunity? Why is no one else working on it? This is kind of a level of analysis that is really critical.”

Webinar next week

​Long Term Engagement in Hybrid Casual — In this 60-minute webinar, I’m joined by Nick Murray to discuss the most crucial topic for free-to-play game development: long-term engagement. What is it, why it matters, and how developers in hybrid casual (think Archero) can take learnings from mid-core. There’s going to be a 15-minute presentation from both Joakim and Nick, followed by a Q&A session. Sign up here.

Articles Worth Reading

+ The VR Winter – Ben Evans shares this phenomenal article on the current state of the VR market and can it ever become a venture scale business. “The successor to the smartphone will be something that doesn’t just merge AR and VR but make the distinction irrelevant – something that you can wear all day every day, and that can seamlessly both occlude and supplement the real world and generate indistinguishable volumetric space.”

+ Mobile games to see least negative impact from COVID-19 — Newzoo predicts that 2020’s global games market will reach revenues of $159.3 billion, up +9.3% from 2019. Mobile games will reach $77.2 billion in 2020, up 13% year-over-year. Covid-19 lockdown is playing a significant role in the growth, helped by mobile having the lowest barrier to entry with free-to-play and with two-fifths of the global population owning a smartphone.

+ AppLovin acquires Machine Zone — AppLovin is expanding again by acquiring Machine Zone and its free-to-play mobile games, including “Final Fantasy XV: A New Empire” and “Game of War: Fire Age”. As a result of the deal, AppLovin will have almost 800 employees and expected annual revenue of $1.5 billion.

+ What does an effective CMO look like? — Eric Seufert shares in this article why he believes that all marketing is performance based and that “If a CMO’s work is anchored to a measurement-first philosophy, the channel mix is almost incidental, and changing it over time is painless.”

+ Telling Is Listening: The Magic of Real Human Conversation — I often talk about the human conversation, the friendship that needs come from founder meeting an investor. This article digs deep into how “Words are events, they do things, change things. They transform both speaker and hearer; they feed energy back and forth and amplify it. They feed understanding or emotion back and forth and amplify it.”

Something really cool

How did the Matrix get created? I recently bumped into the making story of the Matrix, which came out in 1999. The movie that no Hollywood studio wanted to back. It’s a really interesting read. Here’s the full story on Twitter.